How to Form an S Corporation in Arkansas
Introduction
Starting a corporation is the first step in taking your business from an idea to reality. It takes time and effort to form an S corporation in Arkansas, but if you’re prepared to do it right the first time, it will be well worth your investment. Here’s how:
File Articles of Incorporation.
The next step is to file Articles of Incorporation with the county clerk’s office in which you do business. If you are doing business in more than one county, you must file separately with each county.
In most cases, the Secretary of State’s office will accept your articles without an appointment. However, if they require a filing appointment or if there is a long wait time at their office, it may be easier to submit your documents by mail.
The articles should include:
● The name of the corporation and its principal place of business
● The name and address of any person authorized to sign on behalf of the corporation (such as directors)
● A statement that all persons signing on behalf of the corporation acknowledge being familiar with Arkansas laws pertaining to corporations
Establish a registered office and registered agent.
You’ll also need to establish a registered office and a registered agent for your corporation in Arkansas.
The registered office is the physical address where the corporation keeps its records, and it must be located in Arkansas. Your business can choose any address that has been approved by the Secretary of State’s Office. This can be either your own home or a business location, but you cannot use an address that is a PO Box or mail center. The only acceptable addresses are:
● A street address (such as 123 Main Street)
● A post office box (PO Box 4048)
Choose your corporate officers.
Once you’ve decided on your business structure, it’s time to choose your corporate officers. Incorporation allows for a maximum of 2,000 shares and seven directors (or officers) for an S corporation. You may choose any combination of individuals as your corporate officers, but there are some restrictions:
● You can only have one president at a time. If you want someone else to be in charge if your initial president can’t make it to meetings or has other obligations that prevent him from being involved in the company, he would be considered a “delegate” rather than an officer with voting rights on the board of directors.
● Your secretary and treasurer do not need to be different people; they can serve as one person in both roles. Your secretary will handle any correspondence between yourself or other parties within the company, so this person should have good communication skills and familiarity with basic computer programs like Microsoft Word or Excel (for example). The treasurer will handle all financial matters within S corporations (more on this later), so this position requires deeper knowledge about taxes and accounting principles than does secretaryship duties alone.
● You may also choose additional officers with titles like vice president, director or vice president of administration—but keep in mind these positions won’t have votes when decisions come up before them on issues such as whether something should go forward into production without further research into its viability among consumers first.”
Write corporate bylaws.
● What are bylaws?
Bylaws are the rules that govern the internal operations of a corporation, including its management structure, officer titles and duties, dividend policies and procedures for amending these policies. There is no law requiring corporations to adopt bylaws, but it’s usually a good idea. Adopting bylaws helps you avoid disputes over how things should be done and what’s allowed in your business — especially if you decide to hire someone else to manage the day-to-day operations of your company (such as an accountant). If there isn’t any mention about how decisions should be made or who has authority over certain tasks in the articles of incorporation — Arkansas law doesn’t require this — then the board of directors has complete control over company policy making.
Hold the initial annual meeting for directors and shareholders, who should pass resolutions to adopt bylaws, elect officers and set up an accounting system.
An annual meeting must be held, either in person or online. At this meeting, which will be open to all shareholders, you will elect directors and officers (if required by your articles). You should also approve bylaws that are consistent with the requirements of your state.
As a general rule, directors are responsible for managing the affairs of the corporation and overseeing its operations. Officers typically handle day-to-day business operations and handle legal matters if necessary. The board may delegate some responsibilities to committees as well.
After you elect your officers and directors, you’ll need to set up an accounting system for tracking profits and losses that’s compliant with IRS regulations—so consult with an accountant if you aren’t familiar with these systems already!
Create an organizational chart that shows who is in charge of which functions, and how major decisions are made.
● Create an organizational chart that shows who is in charge of which functions, and how major decisions are made.
● Include a list of the business’s current employees, as well as their positions and titles.
● Outline your responsibilities as the chief executive officer (CEO) of the S corporation.
Draft label agreements between the individual shareholder/employees and your corporation for fringe benefits, health insurance contributions and retirement plans.
An S corporation is a type of corporation that has elected to be taxed as a partnership. This means that the shareholders and employees will receive W-2 forms instead of 1099s, but they are still considered self-employed.
Unlike other small business structures such as sole proprietorships and partnerships, an S corporation is not bound by the $600 annual filing fee. Your business may also qualify for tax deductions related to your business expenses if you have an S corp structure in Arkansas. For these reasons and more, forming an S Corp should be one of your top considerations when starting up a new company in Arkansas or any state where it’s available.
Get a federal employer identification number (EIN) from the IRS.
Once you’ve chosen a business name, it’s time to apply for an EIN from the IRS. An EIN is a tax identification number that is required by the IRS whenever you’re doing business legally in any way. In fact, it’s often used as a substitute for your social security number when submitting paperwork or applying for credit cards and loans.
To obtain an EIN, simply call 1-800-829-4933 and explain that you need an Employer Identification Number (EIN). After providing basic information about yourself—like your full name and address—you will be given a form on which to record your new EIN number. Once this process is complete, keep this information on hand and store it with your other records when forming an S corporation in Arkansas.
Get a certificate of good standing from the Arkansas secretary of state’s office.
To get a certificate of good standing from the Arkansas secretary of state’s office, you’ll need to file an application with them.
You can complete and submit the application online at [Arkansas Secretary of State’s website](https://sosweb.sos.arkansas.gov/clerk/submitCGOAForm.do?id=11654). The form asks for information like your business name, county location and type of business entity, but it also requires you to provide a copy of your articles or certificate so that they can verify that it is valid and active.
Once submitted, you will receive confirmation by email within five days that your certificate has been processed and is ready for pickup in Little Rock, Arkansas (check their website for other locations).
Submit Form 2553 to the IRS within 75 days of your S corporation election becoming effective to apply for employee benefit plans with favorable tax status, such as 401(k) plans. If you don’t intend to offer employee benefits, you can skip this step.
You can use Form 2553 to apply for employee benefit plans with favorable tax status, such as 401(k) plans. Your employees will appreciate the extra money they receive in their paychecks, and you’ll be able to deduct all contributions made on their behalf. If you aren’t offering employee benefits, however, do not submit this form within 75 days of your S corporation election becoming effective.
The more organized you are when you form your corporation, the easier it will be to keep organized in the future.
One of the biggest benefits of forming an S corporation is that it gives you more control over your business than an LLC. The reason for this is that S corporations, unlike LLCs, have the following legal advantages:
● You don’t have to pay self-employment taxes.
● You can hire family members as employees and pay them wages, even if they’re related to you by blood or marriage. This can save money on payroll tax expenses because related parties don’t have to pay federal employment taxes on wages.
● Your stockholders don’t need to be U.S citizens or residents. In fact, they could all be foreign nationals located anywhere in the world (including Antarctica). However, keep in mind that there are restrictions on who can own shares in your company and how many they can own based on their citizenship status—check with an attorney before making any decisions based around this point!
Conclusion
This post is a good starting point for anyone who wants to form an S corporation in Arkansas. But keep in mind that forming any kind of business requires careful planning, which can take time and research. Don’t feel like you need to rush through the process, especially if this is your first time doing it! Take your time and learn as much as possible before jumping in feet first.
